SHORT TERM: market gives back most of yesterdays gains, DOW -173
Overnight all the Asian markets were higher. Europe opened lower but closed +0.2%. US index futures were basically flat overnight and at the open the SPX vacillated around unchanged before rising to 914 by 10:00. At that time the FHFA reported home prices -7.3% v -6.9%, and Existing home sales were 4.68 mln v 4.55 mln. The SPX quickly pulled back to 906 and then rallied again to 914 by 12:00. Failing to break through and hold the 912 pivot the market turned over and headed lower, led by the financials. By 2:00 the SPX broke through 900, bounced over 900, and then headed lower again. For the day the SPX/DOW were -2.00%, and the NDX/NAZ were -0.95%. Bonds lost 1 1/4 points, Crude gained 65 cents, Gold dropped $2.00, and the Euro was lower. Support for the SPX remains at 848 and then 789, with resistance at 912 and then 935. Short term momentum was overbought at todays highs and was nearing oversold at the close. Tomorrow, the weekly Jobless claims at 8:30 along with Durable goods orders. At 10:00 New home sales will be reported.
With today’s failure to hold the 912 pivot the short term bias remains to the downside. This market continues to be choppy trading between SPX 879 and 930 for nearly the entire month. SPX 876 remains a key level. A break below SPX 876 would suggest that the uptrend is over. A rally above the 912 pivot and hold, would suggest the uptrend should continue. With medium and long term market momentum coming off overbought levels the likely result will be to the downside.
MEDIUM TERM: uptrend, but cautious
LONG TERM: bear market